Business executives have a favourite whipping boy when it comes to inflation-that convenient scapegoat wages. Every time trade unions call for fair salaries to be paid to workers, the entire business sector goes into action. Tie wages to increases in productivity, they scream, else it will cause inflation. In the first instance, there is no evidence that productivity by workers is objectively measurable, despite all the jargon, because so many factors impact on productivity, most of which are not under the control of the worker. In fact, bad management is the greatest contributor to poor productivity, and any independent study would verify this. More than that, wage increases over the last two years have been moderate but inflation has been rising at a tremendous rate. There is no evidence whatever that wages contribute to inflation since it cannot be denied that a large proportion of the country's inflation is imported.
Business people increase prices when wages go up without any reference to production costs in order to take fullest advantage of the additional money circulating in the economy. Wage increases had nothing whatever to do with the financial mess in which the country finds itself. The reason was the greed for profit by the business elite which missed no opportunity to fill their already bulging pockets, without returning to the country its share of their gains. That is the reason for the economic fiasco, and the records show that billions of dollars in taxes remain unpaid to date, with businesses claiming inability to pay while stashing their ill-gotten gains abroad. The entire nation must be in awe of businessmen claiming insolvency without any effort to account for the money earned during the boom period.
But, of course, according to business executives, wage increases will cause inflation and so many supposedly learned people parrot that ordure as if it is an incontrovertible fact without providing a shred of evidence to support their position. That is exactly the reason that the country will not easily recover from this situation because people who know better are afraid to bell the cat.
Karan Mahabirsingh
Chaguanas